Posted
by
timothy
on Wednesday May 30, 2001 @03:21AM
from the sehr-toll dept.

XMLGuy writes: "Over on heise online there is news that the German Telekom will be launching a prepaid Internet payment card called "MicroMoney" this Fall. The idea is that you buy the card from places like a gas-station, scratch off the covering of the code number, then sniff the card (ok -- so no sniffing). You then use the code number to pay for whatever you happen to want to buy online. Up to now only a couple of merchants are listed -- so it will be interesting to see how this takes off. Oh, and as an add-on you can also use the card in public telephones. The cards will be available in units of 20, 50 or 100 German Marks." The Fish is your friend. These are supposed to soon be available at over 80,000 retail outlets across Germany, with 16-digit PINs. Think "phone card."

Electric money is quite simply, the work of Satan:) For anyone even vaguely concerned about privacy and Government intrusion (which should be you if you're reading/.), then opposing its introduction is somethng you should be doing.

If you were English (obviously you're not), you'd be aware of prepaid cards like this for mobile phones, and would know that they are WAY better for privacy than whatever you're probably using now.

I can walk into a shop here in London, buy a mobile phone for cash, then buy £5 cards from the newsagent (also for cash), and use them to make calls. 100% anonymous. Physically, it works exactly the same as is described here - the card has a long number on it, you scratch the silver crap off to reveal it, then dial a number on your mobile and type it in. Then you have more credit to make calls with.

They try to encourage you to register your phone, by offering some free credit if you give them your name and address, but you sure don't have to if you don't want to. It's a prank caller's dream! Now imagine that you can get a £5 card for cash and use that to buy pr0n online.

So how is this "a sneaky way for the Government to get your life on file" ? Or were you just trolling?

I hear a lot of people say that e-commerce is slow to take off in Europe because credit-cards are not widespread. This is only a half-truth. In Germany at least you have three options:

For German sites, yes. The beauty of e-commerce would be that you can order around the entire globe (I get my DVDs from Australia, my books from England and some geek stuff from the USA). However, if you want to do that, a creditcard remains a must.

Actually, your idea of free posting in the beginning would still give trolls and 'baits a free ride.

I would like to raise the barrier to make sure that people think twice before posting. To see their post as an investment (after all, it costs them initially but if it's good enough they earn karma etcetera) and thus make sure they post high quality.

Please, there have been innumerable cases of credit card databases being stolen and that's just the cases we've found out about (so no more over-abused waiter myth).

And fortunately that never happens in real life? I did not claim that it was completely safe, all I said was that it's not unsafe compared to what happens in real life. _Especially_ not because of the reimbursements, indeed.

And there have not been "innumerable cases of credit card databases being stolen", it just makes a larger impact because it's big news. I am positive that in the same timespan just as many creditcards are being used fraudulently because they are physically stolen or copied, although since those are always stand-alone cases you hardly ever hear about it.

This will be a positive boost for e-commerce activity. Many users do not shop on the Internet because they are afraid of giving out their creditcard information. Or here in Europe, because they do not have one because creditcards are not as widespread as in Northern America.

Of course, if you order a lot on-line then this won't be convenient at all. Think 'cell phone', the only people who do not have one do not make calls on the road often. So the only users who will use this will be the casual ones - still a huge market!

I'll stick with my creditcard though. Unsafe? I doubt it, I've been using it on-line for six years now and I have not encountered any false transaction yet. There's a bigger chance that some vague waiter at the restaurant copies your details when your card is out of sight than a cracker decrypting your SSL connection or breaking into your favourite e-shop.

So in the future I will have to pay a cent per article and two if I want to comment. Moderation in 5 cents a point?

No, here's the deal. It does cost one cent to comment (after all you are using Slashdot to punish your thoughts). However, if you are moderated up from your original score, your post is free. After all, your post definitely contributes to Slashdot.

Furthermore, users who have high karma no longer get bother with banner ads anymore, since all the trolls would generate enough income for/. to give the elite (and karma whores) a break.

Posting anonymously costs more because of the complications to scramble the connection between payment and post.

I think it would make the forum a lot more valuable. On the other hand, more reason to abuse the mod system.

I hand over cash at a till, and get a key in return that allows me to buy online without having to use a credit card.

The D-T system actually ensures privacy. The best the government (if you're horribly paranoid - as you appear to be) can work out is that this card was sold at that service station and that good bought with it were delivered to this address. Or with soft goods this IP address.

And that's not to say that the card in question hasn't changed hands a number of times in between.

7-11 sells 2 prepaid American Express cards. One [7-eleven.com] is only good for internet use and the other [7-eleven.com] is good with any merchant. There is a $1K max limit, 4% up front commission, and the card can only be used in the USA.

(Chorus)
'Cause I like to spend (Micromoney)
So much (Micromoney)
Too much (Micromoney)
Not good (Micromoney)
Not fine (Micromoney)
Where mine? (Micromoney)
It was mine, but I spent all night
They said, "Yeah..." (Yeah!) "Yeah..." (Yeah!) "Yeah..." (Yeah!)

They said I could spend it, Micromoney
Now I can't end it, no more Micromoney
I can't stop surfin' though I have no cash now
Can't stop now, no Micromoney
Need more (Yeah), I said, "More!" (Yeah!) Yeah! (Yeah)

Deutsche Telekom really came across a great idea when they decided to link "phone cards" with MicroPayment CC Numbers.

For those of you who think these are like American prepaid long-distance cards, or prepaid cellular cards, these are very different. Phone cards that can be used in public phones in Germany are thin plastic cards with a magnetic strip on one side. The closest I've seen in the states are NYC Bus/Subway cards. You buy them at a News Stand, and you generally *always* keep one with you. Even if you have a cellphone. The German ones are especially nice, because they tend to decorate them as many countries decorate their postage stamps. (I know people who have collections of used ones)

This system, also known as an "electronic wallet" is known all over Europe. Well, okay, sorry....I know it for two other countries, but I guess it exists in many other ones.

You're right, it's been around in Denmark since 1991 under the name of Danmønt [danmoent.dk]. I've tried it once and will never use it again. The lady at the till succeeded in convincing me that it was ever so handy and convenient, since with this card I never had to carry small change any more, and so I bought a card worth DKK 100 [xe.com].

It turned out that the place that sold me the card didn't accept the card as valid payment (!), nor did any other shop I use regularly, and when I decided to cash in the amount on the card -- since I obviously couldn't use it anywhere I wanted to -- I had to buy a stamp and an envelope in order to send the card via snailmail to PBS [www.pbs.dk] (who owns Danmønt) for them to transfer the remaining amount onto my bank account.

Interest - when a distributor buys a pack of cards off you, you have some cash from them and bank it. Sometime later you have to honour the face value of the card when a retailer contacts you. In between you get some interest.

Wastage - think of all the small change lost down the back of the sofa etc. Think of broken cards etc. When you make the tokens and get paid for them, if they aren't cashed in then you get to keep the cover price!

Both of these seem like small amounts but trust me, they will add up. Pretty good proposition I reckon:) Governments should license any attempts at printing currency like this, to prevent abuse.

Omnitel [omnitel.it] - the Italian mobile company part of Vodafone group - has already launch such a service: it is called Omnipay [omnipay.it].

The service is divided in prepayed and on-phone: prepaid is working as described for Deutsche Telecom, while on phone is the possibility for customers to confirm transactions done with their credit card on the Internet with an SMS (which contains an order specific code) originated by their personal mobile telephone.

Here in Austria (and Germany) we have the Paysafecard. [http://www.paysafecard.com].

It seems to be similar somehow. Each card is an anonymous account. After you spent all your money the account is gone.

Another already working non-card system is bezahlen.at. [http://bezahlen.at] Here you get a pass-through bank account which is connected to your real bank account. If you buy something you give one authorization to bezahlen.at. They have full access to you bank account, but you have to confirm each payment.

That industry also has a bad reputation for credit card fraud, overcharging, and so forth. They're probably gambling that not too many people would want to make a fuss and contest the charges, and for those that do, they can always send paper checks with embarrassing names/letterhead to decrease the probability that the complainer is willing to *deposit* it...

This is essentially the same system, that a company from Vienna, Austria, tries to establish. You can find more infos here [paysafecard.com]. But you'll need the fish there as well.
I'm sure the web needs some kind of "small fee for the seller / small amount for the buyer" payment solution. Credit cards are good for big payments. E-Cash solutions are essentially dead.

Another poster mentioned that the cards use 16-digit numbers, so there are 10 thousand billion billion possible codes. If a billion cards are produced, you would have to search through an average of 10 thousand billion codes before you found a valid one (by which time the retailer might have become a little suspicious).

Key generators don't work by trying random numbers, they work because someone reverse-engineered the software and figured out how it validates its codes. If the codes are random, and are validated by checking them against some central list of valid codes, it will not be possible to build a key generator.--

I'll stick with my creditcard though. Unsafe? I doubt it, I've been using it on-line for six years now and I have not encountered any false transaction yet. There's a bigger chance that some vague waiter at the restaurant copies your details when your card is out of sight than a cracker decrypting your SSL connection or breaking into your favourite e-shop.

Please, there have been innumerable cases of credit card databases being stolen and that's just the cases we've found out about (so no more over-abused waiter myth). The real reason credit cards are safe is that the credit card companies will reimburse you if the card has been used fraudulently. On the other hand this gives you zero privacy. The death of cash will be a great loss and so this new scheme sounds great and worth supporting.

I think you'll find that's wrong. VISA recently released a statistic that ecommerce accounted for 4% of transactions but 50% of fraud. Some mentions are here [zdnet.com] and here [commerce.net] etc. Take for example CD Universe having 350,000 credit card details stolen as told here [cnet.com]... how many can a waiter copy down?

You are reimbursed both online and offline to the tune of $50 (£50 in UK) for now, but credit card companies aren't charities. The costs *will* be passed on.

In the offline world fraud is less common because in transactions with non-reputable parties you usually use cash (if you are sensible). This new scheme is there to provide you with the equivalent service. I'm all in favour of the digital equivalent of cash, and will be watching this new scheme with interest!

If you were English (obviously you're not), you'd be aware of prepaid cards like this for mobile phones, and would know that they are WAY better for privacy than whatever you're probably using now.

I believe such things are also available in America now, too. I know I've seen ads for prepaid cell phones (cash up front for the phone and n minutes, and you go back in and "recharge" the phone when you run out). It's possible they require you to give your name/address/etc anyway, but I really don't know about that.

(BTW, I think the original poster was just trolling, or he has some serious issues, or both)

If this product proves popular, then this new form of currency could begin to impact the economy and some yet-to-be-quantified measure of the money supply.

Like banks of the 19th century that issued their own currency, I suspect that private organizations issuing electronic cash might eventually be regulated out of existence if the governments decided to preserve greater control over the money supply. Or, more probably, they would be subject to requirements such as having sufficient reserves to cover draws on electronic cash that they have issued.

So, then, would measures of the money supply that included micromoney or ecash constitute M6 [whsmithonline.co.uk]?

Where do you see a new form of currency here? Do you consider tickets of all kinds, calling cards, or special rate telephone
numbers as new froms of currency as well?

If I am able to exchange these cards for a large number of goods and services with a large number of people, then it would qualify as a currency, IMHO.

Calling cards are restricted in what they can ultimately be used to obtain. Probably a bum on the street would not be able to obtain the same value as ordinary currency if he wished to exchange a telephone calling card for an alcoholic beverage, for example. So, no, I wouldn't regard such nominal use restricted telephone calling cards as a currency.

Whether micromoney achieves the kind of impact on the economy that I am hypothesizing depends on two factors:

Universal Recognition of Value: Who accepts such micromoney without substantially discounting its value?

Volume of Use: How much value resides in such cards relative to conventional government issued currency, gold reserves, etc.

It's impossible to crack this stuff. It's so impossible, my cow-orkers build a dozen of these systems a week, and they're absolutely rock-solid bulletproof. We already have the technology to do this, and it's even affordable to put them into consumers pockets. If you want them anonymous, we can do that. If you want them traceable, we can do that. If you want (and this is the clever one) them to be anonymous, yet irrefutable, we can even do that.

Of course you're right - they're easily crackable. Some pointy-hair will misunderstand it, or an overworked contractor in a bank won't be allowed time to do it right, or (FFS!) someone will let M$oft implement any of it. It will be broken, and it will be some stupid trivial hole that does it.

1. Pay anonymously
2. (DM won't work, they will introduce Euro's!) Europe wide, a thing PayPal has problems with (I worked on a project to reintroduce PayPal into Europe, it failed!)
3. Trustworthy systems and E-Money could help the new economy out of their misery, dot.coms just need customers right?
4. European idea, somehow someway, Europeans like it in their own way, no offence to US citizens

Creditcards may not be as widespread as they are in the US (Most people have no more than one, if they have one at all).

However, Debitcards are far more widespread, at least in the UK we have Switch and Solo, to name two. We also use Direct Debit to pay for regular bills, which doesn't even require the company to send you a bill each month or each quater.

But yeah, people still don't like to use Credit or Debit cards online. It's an odd world we live in.

Anyone got any idea what's in this for the card providers? I assume they're planning on taking a cut of any transactions made or charging an extra Mark or something on each card, but I couldn't find any info about this.

Whilst I can see the appeal for people who're unwilling to give out their CC, I'm wondering how much of a profit they think can be made off such a venture before people stop buying the cards.

From living in the US I know this would never work there but I've been living in Germany for the last year and I think it could work. The Germans are very differant when it comes to money. They don't really use credit cards, they don't buy stuff unless they have the money first. My mobil phone that I bought in Germany works on the same princapal, when my phone doesn't work I can just go to about any store and buy a prepaid (about $25) phone card and re-activate my phone. I think pre-paid internet money is a better idea that spending money we don't have.

This seems to be using much the same model as Internet Cash [internetcash.com], a New York based start-up who issue pre-paid cash cards with a scratch-off security code. Internet Cash have a good selection of merchants [internetcash.com] with which you can spend, which is vital since often merchant acceptance is the biggest barrier to getting these things to go. They also have a security model [spendcash.com] which is, in my considered opinion, soundly founded in cryptography, so you won't be seeing any free-ware PIN number generators.

Disclaimer: My company sell equipment to Internet Cash, so I have a slight vested interest, but I still think that their technology is sound in a purely technical sense.

I live in Leeds, UK where a similar system was on trial (for eventual roll-out nationally). As far as I can remember, the whole thing didn't catch on. I personally thought it was a good idea but never actually got one myself. The benefits didn't seem to outway the (small amount of ) effort. Now if I could use this Europe-wide when I am travelling around I think it would be far more useful - no more trouble with cash machines or transactions. And (including in UK I should add) I would have no worries about the "waitor taking down my credit card number while I'm not looking" problem.

As for these internet payment cards, I think they're a great idea. A little more anonymity never goes amiss (especially in the UK where it seems to be disappearing by the minute).

Or here in Europe, because they do not have one because creditcards are not as widespread as in Northern America.

I hear a lot of people say that e-commerce is slow to take off in Europe because credit-cards are not widespread. This is only a half-truth. In Germany at least you have three options: credit-card, wire-transfer, and the good, old C.O.D. Many businesses just ship COD because it's safe and a no-brainer. Few offer payment via credit-card because wire-transfers are so widespread. Additionally wire-transfers are relatively cheap ($0.20/transaction), safe (rogue charges are easily disputed), and convenient all without opening a line of credit.

Someone tell me why a wiretransfer is so costly in the USA ($20) and so cheap in Europe ($0.20).

I dont think so. Deutsche Telekom state in their webpage that you can pay anonymous. If you can buy this card at every kiosk, wouldnt it be a little complicated to demand the ID card from everyone? With 20 people queueing behind?

And I have to correct myself: there is no chip on this card (I assumed that because German cardphones use chips), its just working with a toll-free access number like most prepaid calling cards.

In Austin, TX a company called NetSpend [netspend.com] is selling prepaid MasterCards. You put some cash in their machine and a card comes out. I think they're adding a fee of $1/transaction. I had one (they were giving them away for free for a while) and I wasn't able to use it at a store, but I did get some cash out of it at an ATM.

Of course it will be checked whether there is sufficient money on the card before it is used. Do you really think a company the size of Deutsche Telekom would overlook such an obvious detail? Also note that this scheme does not necessarily inherit the problems associated with micropayments in general (those outline in this [openp2p.com] rant, for example), as you have a certain amount of control of the amount you're spending, thus limiting the stress-factor.

Almost everyone seem to be on their own personal crusade against micropayments, yet noone is satisfied with the way you pay for low-cost internet-services today (banners, spam etc). I say we should give these guys a break. What's so awful about trying to come up with a different way of doing things? It's not like anyone will force those cards on you anyway.

Certainly a nice idea, but this would stop new members. After all, you'd have to pay for your posts simply because you don't have any karma yet. So something should be made that newcomers can post for free until x weeks after their subscription.

Well Proton is widely spread in Belgium, a small country with very high population density/shop density, and it`s surprising but allomost any shop offering a bank-card terminal has a proton slot on it. As a matter of fact I daily buy lunch with my proton, and 7 years after introduction it`s hard to find a shop not advertising Proton next to Visa, Mastercard and Banksys.

If I`m not mistaken Proton was a tied effort by Banksys and all major banks and shoppingmalls, giving it enough weight so the smaller shops could jump on the system too. It was first introduced in leuven, a typical university city where 80% of the population is a student. From there on it gradually came allmost unnoticed and now everyone I know here locally uses it. I think it`s a big success.

Prepaid is much easier than processing small transactions in real-time. Bouncing a transaction off a database is the way to go... but all of you know that. Check out http://www.interactivcash.com if you want to see more about a similar technology.

Phone cards are something very different. First, they are not cards with a magnetic strip, but with an embedded chip. Also, phone cards store the remaining value on the card. They are not connected to some sort of account anywhere (not even an anonymous account). They are not suitable for online payment because the recipient has to be certain that he's interacting with a real phone card. The security is based on checking for compliance with a very tight timing specification and strict size limitations, so that you can't emulate a card inside a public phone. You can't check this online, so it's back to account based schemes for now. BTW, Deutsche Telekom's "MicroMoney" is not really "money": You can't give some of it to a friend for example (unless he is a merchant, of course). While this may be a good transitional product for online payment only, true electronic cash is still far away.

These cards can't be refilled. You use them, you throw them away. They are like prefilled withdraw-only anonymous accounts. Is marketing going to pay over and over again for the necessary reregistrations after the relatively small-valued cards are used up? On second thought...

sounds similar to a UK company, splashplastic. they're leveraging the established "debit phone card" structure here. you get a card, go to (almost) any news agent and put cash on it, then spend the money online. nice anonymous way to turn hard currency into digital cash anonymously.
problem is getting enough merchants to make it compelling, the cool thing about online shopping is price comparisons and niche markets. proprietary payment schemes don't work well there.

But how do we know that they're system is secure? I've heard of mobile phone card numbers being used before you've bought them and scratched the number off. Being anonymous, how do you prove that it wasn't you who spent it?

After the collapse of net advertising schemes micropayments may as well be not only the rescue belt but something that will cause a new phase of internet development.

All kinds of net services become economical if you can convince a lot of people to pay a few cents as effortlessly as possible. The only question is how to develop and market a micropayment system successfully.

I think Deutsche Telekom has just found a good option with prepaid cards.
Plus, I like the idea of anonymous web payments.

This sounds almost exactly like NetSpend (http://www.netspend.com [netspend.com]), except that NetSpend allows you to use a debit card to access your account as well. Not only that, but the service aims to provide quite a bit of obscurity about who is making each purchase. I found out about it when I got a free $1 card at the local movie theater.

No kidding. How many phone companies are getting nailed due to cramming? And that's just for a few dozen random charges. Imagine a monthly internet use statement with literally hundreds, if not thousands, of transactions. Seems like fraud's dream come true.---

Not really crazy, but practical. Look, first of all, you got it wrong: technically no Euro currency exists anymore on it's own...Technically seen, by spending my franks (local currency), I *am* spending my Euro's. My existing coins and bills are just placeholders for the Euro's. That is the way I see it, and so do banks: internally there is just a one-to-one mapping, new accounts are exclusively Euro etc...

Secondly, you forget the human part of currency. People are fond of their franks/marks/whatever, and don't want to change. Imagine advertising a new service that *only* uses the yet unknown Euro: that is simply not a good idea, because people won't buy it. My bet is that they just chose a certain amount in DM, and that actually internally the Euro representation will be used.

On the other hand, it is quite impolite to discuss this topic in french on an anglophonic forum. It was quite a wild guess talking french to me, because, I am a Flemish Belgian....this means my mother tongue is dutch and not french:-)

Sorry to hear about the rippoff danish system. I know that the MiniCash system doesn't cost anything for the card (it is standard on any debet-card), but the recharge costs a small amount. I never ever saw it used by anyone in shops (they don't take it where I buy my newspapers), but it works very well to pay parking. It's the only thing where I saw people use it, actually.

At launch the Proton card, did cost money, so it really slowed down introduction. (Or it could have been the terminals that were expensive or so...) They changed that and with a good publicity campaign it became more wildely known. As for usage statistics: it's been a while since I was shopping in Belgium, so I don't really known. When I was there, I saw people buy bread using it. The proton card is available without the debet-card combo, and the MiniCash is not...which makes the two quite different. (Would give a proton to a kid, but not a MiniCash)

The whole thing is a bit sad, because the idea is okay...but the implementations are really crappy. The terminals should not cost a thing to the shopkeepers (which they do I think) because these would be shops where you typically use coins...the extra cost of a terminal is simply too huge. On the other hand, the consumer is not willing to pay to recharge his cards... It's a tie, unless somebody want to pay these systems are bound to stay unpopular. I don't mind the 0,2€ they ask for charging the card...when, loading the maximum amount of 50€, it's just 0,375%.

This system, also known as an "electronic wallet" is known all over Europe. Well, okay, sorry....I know it for two other countries, but I guess it exists in many other ones. The Belgian system is called proton [proton.be] (warning: shitty flash site) and the system in the Grand Duchy of Luxembourg is MiniCash [minicash.lu].

One of the big disadvantages is that those systems are not compatible from one country to another. This is especially frustrating for people like me (Belgian living in Luxembourg) who don't like to carry around cash. I use my MiniCash just to pay parking place, and that's it.

I don't think either of those two systems support online shopping. (At least it is not advertised) Homogenizing those systems all over Europe could be a solution and a primary step towards using these systems online, but unfortunately I don't know enough of the internals to think of a solution.

I find that from my Bonn based DSL hookup, T-Online does not _block_ SMTP; instead, it redirects it through their own SMTP server that replaces my sender address with my T-Online address. This is not so nice when using multiple accounts, so I signed up for their SMTP relay, using it as smart relay host with Sendmail. It works like a breeze for me.

Well, this is yet another stab at Micropayments in Germany. This marketplace has seen quite a lot of those. Card based and software based. First there was the Geldkarte, a stored value card based system for the real world which never found real acceptance despite the fact that there are millions of users out there. Why? The added value was not there (besides paying ticketless in Parking garages or in public transportation). The private banks committees are nevertheless still trying to push it into the Internet market. Doesnt help, the require a class 3 card reader (_with_ a crypto pinpad and a display), that costs money (hardware, support, rollout logistics etc.) and the user doesnt like it. Then there were eCash [ecash.de] and CyberCash [cybercash.de]. eCash was developed by DigiCash and introduced by Deutsche Bank (worlds largest bank) in 1996, CyberCash was the "enemies" response by Dresdner Bank, Hypovereinsbank and others. eCash is a Cypherpunks wet dream. It is anonymous, you can send it to others, there are clients out there for all the real OSs (Linux, FreeBSD, HP-UX, Sun, etc.) and it had large support in the hacker community. It is going to be shut down in a month. Why? Deutsche Bank says in their letter it didnt meet their market expectations. It was another value stored system, it required a complicated subscription mechanism (say loud and slow Anonymity and Bundesbank (federal bank)). Now Cybercash, developed by the now defunct Cybercash corporation (Verisign and FirstData just bought the assets). It should have been the consumers dream. Micropayment, Debit-Payment and CreditCard payment (not SET but C5) combined in one wallet. And the support of all the big banks in Germany but Deutsche Bank. So why did they fail? The software sucked (not all the beautiful OSs available that eCash had), was complicated and not marketed correct by the Banks. The consumer was not ready for a system like that. It is so convenient to enter your credit card number and shop online, isnt it? The consumer is protected when he shops online with his credit card. Protected by policies. The merchant has the risk. But, and here is the point of failure for all the systems described above, the Banks did _not_ give the merchant enough incentives to market the new systems (e.g. by giving rebates when you pay with eCash). And for the average consumer anonymity is nothing. At least nothing yet. So what does Deutsche Telekom do different? From what I read these cards will be bundled with phone card functionality. The consumer can phone on public phones and can spend money on the Internet. The phone card market (stored value, wasted money) is already prepared. Everybody has one over there. Now bundle it, get enough shops and there you go. The only problem (in my opinion) will be the "Kreditwesengesetz" of the federal bank (see here [bundesbank.de]). This says that everybody who creates so called netmoney has to be a bank (Telekom is no bank) and has to comply with the rules. Now this is going to be a lot of fun...

The most important element of this payment system is not convenience or security, it is anonymity. Every time you use your credit card online, you broadcast all of your personal information to the recipient. With a store-bought number that can't be traced (well, "can't" is probably too strong of a word, let's say "probably won't"), you can make purchases at potentially embarrassing online merchants without giving out all of your personal and financial information. Add a P.O. Box to receive your deliveries and you're home free!

If they could combine this with some sort of age verification (i.e. won't be sold to minors), this would also be a boost for internet porn sites. Imagine subcribing to an online porn site without telling them who you are...tempting, no? Even more so for those among us who aren't worried about the money as much as the potential for embarassment. Plus, most people could afford to lose the twenty dollars or so that is on the card to a dishonest porn site, whereas you wouldn't want them to have your actual credit card info.

sorry, I read franks for francs.
Just a closing comment: of course euro migration will be quite "fun", but one could have think of Deutshe Telekom, as a big and responsible corporation, to actually help prepare people with euro, instead of introducing yet another monetary product in mark, so close to the change date.

Electric money is quite simply, the work of Satan:) For anyone even vaguely concerned about privacy and Government intrusion (which should be you if you're reading/.), then opposing its introduction is somethng you should be doing. This is one of those times when we don't need any more technology, because what we have easily suffices.

Sure, you can argue, we already use electronic money on the internet. Well yes we do, but we don't need new forms appearing, because every time they do it becomes more likely that a country's government will decide that the time is right for a general electronic currency, and introduce it.

And then every purchase you make is logged and tracked. And at will, the Government can block your money. Don't think they won't either. If you're even suspected of any wrong-doing then you'll swiftly find yourself unable to buy anything unless you check into the police station every day. And in the modern liberal trend of protecting people from their own "mistakes", the list of verboten behaviours is growing by the day.

Quite simply, electronic money is just a sneaky way for the Government to get your life on file. Don't be fooled by the technology.

Reading the article (translated via babelfish so forgive me if i'm wrong) it looks like the providers make their money, not by marking up the cost of the cards but by the fact that you buy the card first and spend later, so there is a latency between them getting the money from you and giving it to the merchant during which they can earn interest on it, allong with the potential for lost cards etc. Kind of the way paypal works:-)

MicroPayments are also done by American Express (thought it may be as a test because they don't market it). At every 7-11 in Florida you can buy a prepaid card backed by AMEX it can be used online or anywhere AMEX is accepted anywhere in the world.

As micropayment systems go this probaly has the best chance of making it becasue it uses current infrastrcutre and standards so no one need special equipment or software.

Remember the easier something is to adopt to the more redially its adopted. Espically if it has value.

The thing is that it is hard from a user's point of view to make a transition from the free Internet business model (where the majority of dotcom companies do not make ends meet) to the commercial model. I for one am willing to pay for some Internet services because that's the way commerce has always worked over the history. At the end of the day, it will still be cheap (we're talking about hundredths of cents there).

The only real problem I see with paying for the navigation is that you don't know before you download a page if it is what you need. And I believe you shouldn't have to pay for something you do not want. Is there any work around this ?

Well there are key generators for little shareware programs up the more expensive software. How long will it take for there to be good ones made so you can buy physical stuff for free? They may have some good random number grnerators but someone can easily try a few thousand combinations in a short time to an online etailer.

I like where Telkom is going with this one...
I'm thinking calling card, and I'm thinking about back in the day when the going rate (bulk) for AT&T numbers was about 20-30 cents.
Can't wait to start ordering off tresorberlin.de:)

I'm an American who's lived in Germany for the last 10 years or so, and am constantly amazed how much resistence the Euro is meeting. Some is well-informed (considering how much the Euro has fallen since introduction), but I believe most of the resistence is simply superstition. People who are completely comfortable with the fact that you can translate pounds into kilograms, meters into yards, liters into pints (etc.), suddenly have all sorts of problems with Euros and Deutsche Mark.

I have a theory about this: Your resistence to change is related to the age you were when you learned about something. If you learned about it in childhood, you don't want it changed. I think this is what makes reforming the schools so hard all over the world (now that I'm old enough to go to Parent's Meetings at the local schools, I'm amazed how the locals cling to the way things were when they went to school).

This would also (to try to get back on-topic) partly explain the reluctance to creative payment plans like this one. The point of which is not to say that people are so dumb they resist these things, but rather that the problems involed in their introduction are perhaps 1% technical and 99% psychological. In other words, the whole trick here is going to be getting the psychology right. The technology will, then, fall in place.

A lot of micropayment schemes had been proposed in the past. This one might work. Its inventors did not think about absolute security or cool cryptographic stuff. They thought about users and practicability.

The resulting scheme has several interesting properties:

It is easy to use.
Ok, usage could be even more easy, but at least it is no more difficult or inconvenient than using a credit card. A payment scheme for online digital goods and services requires convenience close to invisibility.

Thresholds are low.
The card does not require software installation, prior registration of the user, or sophisticated authorization procedures. Just get a card and use it, that's all.

It is easy to understand.
None of the many questions Joe Customer may possibly ask about a micropayment scheme has to be answered by using vocabulary from computer science or mathematics, or Alice-and-Bob-and-Mallory stories.

Customer's risk is limited and assessible.
There is no way a customer could lose more money than his card is worth at the moment -- and mom and dad can actually understand why. The scheme also allows for exclusion of fraudulent merchants.

Sufficient privacy is guaranteed by design.
The card is bought anonymously. Payments made with the same card can be linked, but as long as none of the payments is linked to a person, those data are virtually useless. In typical micropayment situations, there is no need to ask the customer for his name. There is even a strong contraindication against any avoidable hassle.
If a single card can be linked to a person, this relationship expires together with the card.

The card is mobile.
It can be used from any computer. No digital wallet, card reader, or other special equipment is needed. The customer doesn't need a computer at all. The scheme also works via WAP, SMS, or voice channels.

Transaction costs are low.
The most expensive thing probably is producing and distributing the cards. Anything else is handled by a computer somewhere on the net keeping a card numbers database and a merchants database and updating both if a transaction occurs.

I feel this is the best micropayment scheme ever designed. It just looks like user-centered design
and a good-enough-approach. There is however one thing that could turn it into another failure: lack of acceptance on the Net. In order to become a real success it has to be accepted by sites throughout the universe. Limited to.de it would be pretty useless.

That must mean that I am one of satans bitches... I mean programmers... (proging some software for a german telecom).

Seriously though, this is done through a bank and the phone company. It is just as intrusive as, say, a credit card. And it will be just as difficult for the Government to track and block your credit card.

(BTW: I do not think that they should be able to do it with the credit card... but it is no worse than the credit card.)

If you could refill it at 11$ for 10$ cash
Or, perhaps by registering (and/or refilling) you could get a discount on your telephone bill. Marketing thinks of many devious things to lure ppl into releasing information.

After all, with mobile phones they encourage registering, and give additional time as an incentive.

(of course there would have to be hidden fees that are ultimately passed on to the consumer, like credit cards do)
-CrackElf

The Deutsche Telekom has done some piloting experiments that did not turn out entirely bad, but they still haven't been able to entirely solve the key generator problem.
They have a system in Germany called the GeldKarte [voeb-zvd.de] (link in German, of course, since it's a German system) which is basically a phonecard-esque payment card linked to a special type of account at your bank; you can load your card with arbitrary amounts of money and use it for cash. This is basically the same thing, except that it works without putting your card in some slot but by specifying your 16-digit number.
The advantage over credit cards is not that evident, except (possibly) that people can't steal over 100 German marks (at present, about $42 or 48) by stealing your number. On the other hand, the high granularity always forces you to keep a large number of cards if you want to order anything online that costs more than these 100 marks.
BTW the card is Euro-aware, of course, because the value stays the same, it's just a different currency. So you buy a 100 marks card and when you use it after January 1, 2002, it's an 48 card. Not a problem. After the euro introduction, they'll probably shift to 50 and start selling them throughout Europe.

The Germans have been scratching and paying for their prepaid cellphones for a while now, but I doubt that this will work.
If you pay for your cellphone, you can throw the card away after using the number. The card number is invalid right after you use it, and all the money if tranferred.
But with this system, you get to keep the card until the money "on" it is used up. How are all the vendors supposed to keep track of the cards? If it isn't done in realtime then I could overdraw a card. And that won't be a problem because I bought the card anonymously.
Also remember that all micropayment systems have failed. The Germany Bank are stopping their micropayment system because nobody uses it.
I just suppose some manager's generating work for his bored department.